(2) There ALREADY is an effective treatment for Chagas, right now -- it was developed over three decades ago. It is being used (very economically, too) in most of Latin America -- by doctors, clinics and hospitals -- pursuant to delegated local, in-country authority, today. That effectively addresses the "acute case" threat, in those geographies.
(3) The tempest in the teapot here is that this old treatment was never FDA approved, for use in the US. But that matters almost not at all, because. . .
(4) Any patient in the US who might present exhibiting an acute case of Chagas could be treated with the drug now in use in Latin America, and safely, too. And now we are to the part that Martin Shkreli (still in-bankruptcy KaloBios' largest shareholder, by the way) and his minions are NOT telling you: under long-standing informal FDA practices, if an appropriately licensed and reputable doctor in the US were to prescribe the existing (Latin American) course of treatment to his or her acute patient, the FDA would almost certainly not intervene. In addition, the current drug is cheap, so even if the patient's insurer balked at covering an unapproved or (solely for the purpose of the US discussion) an "experimental" drug, the total cost would come in somewhere around $600. [Upon MSM request, I will provide the footnoted references for all of these statements, above.] It is true that, in theory, the US FDA could ask the doctor to provide evidence of safety -- and the doctor would simply point to two decades of treatment in Latin America -- of tens of thousands of acute cases in remission. But we might be talking about two or three actual acute patients in the US, over the next decade -- so, FDA is unlikely to intervene. People often forget that FDA has only limited jurisdiction when a doctor and patient agree on a course of treatment (after a full informed consent, documented in writing) -- so long as no US drug manufacturer is trying to influence that course of treatment, and the course of treatment is generally regarded as safe -- the US FDA has rather limited authority to regulate the doctor's private relationship with his or her patient. Got all that?
So -- now that all that background is laid out -- here is what makes KaloBios so interested in the old drug's approval in the US. If KaloBios submits a full blown new drug application, and runs clinical trials on the old drug, to essentially document the Latin American experience (and does so successfully), FDA will grant KaloBios a "neglected tropical disease" approval. What would come with that neglected disease approval (at least in theory, under FDA's recent rules) is a fully-transferable "FDA priority review" voucher, for any other drug candidate at all. [To be fair, this all has to do with the way the Congress enacted these changes. But I'll grant that the Congress-folk could not have foreseen the sudden rise of such an entirely feckless, purely charred-soul pirate, like Martin Shkreli, in my estimation -- which is how we've all landed right here, right now.]
Now, the take-away, for such pirateering? Well, the last such voucher issued sold for $325 million -- and earlier ones fetched between $100 million and $200 million. That was what Mr. Shkreli was angling for, in the days prior to his arrest in Manhattan. [Other large pharma concerns will pay dearly to cut in line, and effectively get VIP all-access passes -- shaving several months off of the overall FDA approval time-line for one of their other, true US blockbuster candidates-in-waiting.] My educated guess is that it might cost KaloBios $20 million to run the Chagas trials -- so a huge win.
So the Congressional (and now FDA-administered) voucher idea is a sound one -- but may lead (as all things do, in my opinion) -- to abuses, at the margin.
I would also say in passing that I understand the people left at KaloBios (i.e., not Martin Shkreli) are trying to hold on to that company's only real shot at emerging from bankruptcy intact: that potential of a $300 plus million voucher sale/payday, some 18 months from now -- if all were to go well, in the Chagas clinical trials.
Now we come to Savant's part of the story, though. Savant affiliates have acquired the rights to the old Chagas treatment -- and claimed yesterday, in Delaware bankruptcy court, that they would still sell those rights to KaloBios, but only IF the court does NOT appoint a special Trustee over the bankruptcy, and potentially convert from a reorg, to a liquidation -- a Chapter 7.
I do understand that the Savant people are just protecting the certainty of their potential business deal. But I must point out that Mr. Shkreli's KaloBios signed a "partially binding" letter of intent with Savant, only 16 days before his arrest on seven felony securities fraud charges. He was well-aware of the FBI/DoJ/SEC investigation for several months prior to that time. So I must ask -- why wouldn't Savant seek a new -- more stable and reputable partner -- for this deal, from here forward? Savant, in the exercise of its own fiduciary duties, to its holders, ought to be looking for ways to terminate the "partially binding" letter of intent, or at least have second and third options under discussion -- should the bankruptcy court agree with the US Trustee (as advised by the DoJ and SEC) that only an independent Trustee will effectively sort out whether Mr. Shkreli's puchase of control of KaloBios was with fruits from his allegedly prior felonious conduct. [More on that, in the next installment.]
In closing (whew!), there is a BioPharma Dive article, this morning, on some of the bankruptcy issues -- which is good, as far as it goes -- (especially about Savant's potential for cold feet, here) but it doesn't remotely tell the rest of the story. That, I will tell right here, in the next installment. Probably after the Super Bowl. . . we will see.
Because pricing and access are two issues that cut across all of the life-sciences, I will cover this little microcosm created by Martin Shkreli, from time to time. [My partially-fleshed out, older backgrounder on it all, is here.]
Namaste, one and all -- and I just hope for a good close game on Sunday -- I'll be happy with either team prevailing. . . smile.